The coronavirus outbreak is making it difficult for the IRS to implement a key stimulus tax provision designed to help struggling businesses, a top agency official said today.
The relief package signed into law last week allows cash-strapped businesses to qualify for quick refunds by redoing their previous years’ taxes to account for their current losses.
The problem is that all of that is done on tax forms that are filed by mail, and office closures are making it difficult for the IRS to process them, said Sunita Lough, deputy commissioner for services and enforcement.
“Other than our one service center in Ogden, [Utah,] all of our service centers have been closed because of shelter in place,” Lough said in a panel discussion sponsored by the American Bar Association. “So forms like 1139 that are mailed to the service centers – you can see there’s a concern that the mail is not being sorted.”
Work is also slowed by social-distancing guidelines.
“If 100 people were going in the building on an average day, when everything was good – we can’t do that. We have to send a far fewer number of people in, and so we are rotating” people.
Liberalizing the rules on so-called net operating losses had been one of businesses’ top priorities in the “phase three” coronavirus stimulus package.
Lough asked companies eager for refunds for patience.
“We understand the need for liquidity and we understand the need for taxpayers to get the refund money because it is really important at this point, but we also have to balance it to protect our employees,” she said.
“We really appreciate the patience – we’re going to work it the best we can.”